Defamation Act 2013: You cannot be serious – Tom Rudkin

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On 1 January 2014, the Defamation Act 2013 came into force in England and Wales, introducing a series of new provisions applicable to the law of libel and slander. Cue a frenzy of speculation among media and reputation management lawyers as to how the new Act would be interpreted by the courts and, more importantly, what impact it would have for those seeking to protect their reputations in the face of false and damaging allegations.

Of greatest interest was Section 1 of the Act, the “serious harm” requirement. Under Section 1(1), a statement is not defamatory of a person “unless its publication has caused or is likely to cause serious harm to the reputation of [that person]”. Where the person affected by the statement is a body that trades for profit, it must show that the publication of the statement has caused or is likely to cause the body serious financial loss (under Section 1(2) of the Act).

Some two years after the Act came into force, the meaning of the serious harm requirement is beginning to crystallise following a number of High Court decisions. Guidance can be gleaned from these decisions, which should be taken into account by those entering into defamation litigation or being forced to defend it. As with any new, developing law, some caution is needed. First, the Act remains in its early stages, inevitably meaning that the principles will develop further over time. Secondly (and in a similar vein), the defendants in one of the key cases decided thus far (Lachaux v Independent Print Limited & Others [2015] EWHC 2242 (QB)) have evidently experienced a similar feeling of disbelief to Mr McEnroe as the chalk puffed up off the line and appealed the decision to the Court of Appeal. That hearing is due to take place in November of this year and may result in a shift from where matters currently stand.

Nonetheless, the key principles arising from the cases decided to date can be summarised as follows:

The serious harm requirement acts in addition to the existing requirements under the common law

Section 1 of the Act does not abolish the need to meet the other requirements for a defamation claim that existed before it came into force. In order for a statement to be defamatory, it must make the claimant identifiable (whether explicitly or not) and it must carry a meaning that “[substantially] affects in an adverse manner the attitude of other people towards [the claimant], or has a tendency to do so” (see Thornton v Telegraph Media Group [2010] EWHC 1414 (QB)).

The claimant must show, on the balance of probabilities, that serious harm has been caused or that it is likely to be caused

If the existing requirements are met, a claimant must now also show that serious harm has in fact, on the balance of probabilities, been caused to their reputation or that it probably will be caused. In Lachaux, the claimant argued that the only change brought about by the introduction of the serious harm test was that claimants now had to show that the statement has a tendency to cause “serious” rather than “substantial” harm. That would, it is fair to say, entail a relatively minor amendment of the common law requirements outlined above. Unsurprisingly this argument was rejected by Warby J, not least because the clear reference to a requirement that serious harm has been or is likely to be caused is simply not consistent with an assessment of the mere tendency of a statement to cause such harm.

Serious harm can be inferred

One of the most scrutinised aspects of the serious harm requirement before it came into force was the extent to which it would raise the bar for individuals and companies pursuing defamation actions. Whilst the test relating to bodies trading for profit under section 1(2) remains relatively untested (see 6 below), where individuals are concerned the decisions thus far indicate that it is possible to infer that serious harm has been or is likely to be caused to the person’s reputation, without any great amount of specific evidence of that harm.

This was recognised in Cooke & Midland Heart Limited v MGN Limited & Trinity Mirror Midlands Limited[2014] EWHC 2831 (QB), the first case that considered section 1(1) in any detail. In that case, Bean J stated that “I do not accept that in every case evidence will be required to satisfy the serious harm test. Some statements are so obviously likely to cause serious harm to a person’s reputation that this likelihood can be inferred.” However, the extreme examples given by Bean J, such as a wrongful accusation that someone was a terrorist or paedophile, combined with the finding that the statements complained of in the case did not meet the serious harm requirement, suggested that serious harm could only be inferred by the Court in very limited circumstances. The judgment has been relied upon by media companies since.

In Cooke, the allegation complained of was found to mean that Midland Heart Limited was one of a group of well-off landlords that rented properties on a street in Birmingham to people receiving housing benefits at rents of up to £650 per month, “thereby making money from the misery of [the] residents“, and that Ruth Cooke, the CEO of Midland Heart, was personally responsible for its conduct and had herself profited and become rich from it. Few would dispute that these allegations are serious and could be very damaging. However, neither of the claimants was able to present evidence about specific individuals thinking less of them. This was understandably explained by reference to the difficulty of adducing specific evidence of harm to reputation. Nonetheless, Bean J decided that the article in question did not come “anywhere near” the type of case where likelihood of serious harm could be inferred, although he attached significant weight to the publication of an apology (see 5 below).

The findings in Cooke hinted at an uphill battle for those seeking to pursue defamation claims. However, more recent cases have indicated that the difficulties claimants might have inferred from Cooke are not as pronounced as first thought, or as the media would have one believe.

In Lachaux, Warby J noted that “the serious harm requirement is capable of being satisfied by an inferential case, based on the gravity of the imputation and the extent and nature of its readership or audience“. In the case, Mr Lachaux complained about five separate articles containing allegations said to have been made by his ex-wife about events that took place in the UAE. In all but one of the articles, Warby J concluded that serious harm had been caused. In the four where serious harm was found to have been caused, the Judge referred to the serious nature of the allegations, the reputable nature of the publishers (namely, the Huffington Post, The Independent, The ‘i’ and the Evening Standard) and their wide circulation. He also analysed the claimant (a French national)’s connections in England and Wales and noted that publication on the scale applicable to each of the relevant newspapers was inherently likely to have been read by a significant number of people who knew him or knew of him and who would have thought less of him. Moreover, the Judge found that it was probable that “the claimant’s reputation has been seriously harmed” in the eyes of other readers who did not already know him.

The consequence of Lachaux is that claimants can (for the moment) afford to be more bullish about using the circumstances of the publication as a means of establishing serious harm. So, in Theedom v Nourish Training (t/a CSP Recruitment) & Colin Sewell [2015] EWHC 3769 (QB), allegations that the claimant had been passing confidential information to ex-employees of his employer (CSP) and had therefore rightly been dismissed for gross misconduct so serious that there were reasonable grounds to suspect it amounted to a criminal offence, were published by email to over 100 actual and potential customers of CSP. These companies were also potential business contacts of the claimant in his new role as a recruitment consultant for another company. Whilst the claimant provided some evidence of people’s responses to the emails, the Judge felt that this did not add or detract much from the inferences “one would normally draw from the fact of publication in a case of this kind“. In fact, the claimant had actually done well in the recruitment business after the emails were sent. Nonetheless, the emails had been sent by an influential and apparently reliable author to a fairly substantial audience that was potentially important to the claimant’s career. Moreover, no steps had been taken to withdraw or apologise for the contents of the email. And, in this context, it was found that the publication of the emails had caused serious harm to the claimant’s reputation.

Conversely, in Sobrinho v Impresa Publishing SA [2016] EWHC 66 (QB) the allegations, concerning the actions of a banker of Portuguese and Angolan citizenship, were published in a Portuguese newspaper found to have very limited circulation in England and Wales and there was no direct evidence of readers of the article having thought less of him as a result of the publication. Moreover, Mr Sobrinho gave evidence at a Parliamentary inquiry in Portugal during which he was able to put the record straight in respect of the allegations. Whilst Dingemans J could not pinpoint the precise reason why serious harm had not occurred, he found on the evidence that none had been caused having analysed the circumstances of publication. Moreover, because no serious harm had been caused, and because Mr Sobrinho was able to put the record straight and the relevant parliamentary inquiry was covered by the Portuguese media available in London, it was also held that no serious harm was likely to be caused.

These contrasting cases show that, although serious harm can be inferred in less extreme situations than was envisaged after Cooke, the publication of serious allegations without any specific evidence of harm to reputation should not be assumed always to meet the test. Due consideration will need to be given to the circumstances of publication including the number of recipients of the allegations, the identity of those recipients and the identity (and reliability) of the person responsible.

It is not clear at what point likelihood of future serious harm should be assessed

There has been some discussion by the courts about the date on which the question of whether serious harm to reputation is likely should be assessed, although the matter has not fallen to be decided yet. In Cooke, Bean J preferred the date on which the proceedings are started, whilst in Lachaux Warby J favoured the date of the hearing relating to serious harm. The latter appears the more logical, particular in the context where serious harm can be inferred to have been caused prior to the hearing. The assessment of likelihood is bound to be a very similar process to the question of whether serious harm has in fact been caused in the absence of actual evidence. In other words, the question of likelihood only really becomes relevant if no serious harm has been caused by the date of the hearing.

Setting the record straight

In Sobrinho, the fact that the claimant was able to give evidence to put the record straight was a factor in the Court’s decision that no serious harm had been caused and was not likely. Similarly, in Cooke, an apology was published in the next edition of the Sunday Mirror after the one in which the allegations had been published. The apology stated that the publisher did not intend to include Midland Heart or Ruth Cooke in the article and was found to be more prominent than the paragraph in the original article referring to them. Bean J considered the apology “sufficient to eradicate or at least minimise any unfavourable impression created by the original article in the mind of the hypothetical reasonable reader who read both“. Of course, there were some readers who might have read the article but not the apology, but the Judge noted that the apology was far more accessible on internet searches than the original article.

It is clear therefore that a prompt and effective apology or clarification may go some way to inhibiting a claimant seeking to establish serious harm. This is particularly the case where the claimant cannot show that serious harm has already been caused and is relying on likelihood. However, an apology will also not always prevent a claim passing the serious harm test if, for instance, it is ineffective. In Lachaux, one of the two Huffington Post articles complained of was removed and an apology published. However, Warby J found that the apology did not do enough to eliminate the serious harm done by the publication. In particular, it only apologised for not explaining that Mr Lachaux denied the allegations and did not retract them or suggest they were false. Prior to that, the article had remained online for over nine months, during which time it was inferred that damage had been done.

It follows that a prompt, fulsome apology is likely to be seen by the courts as seriously undermining a claimant reaching the serious harm threshold. On the other hand, delay or an ineffectual apology will be less likely to be seen to have undone the harm caused.

The situation for companies remains relatively untested

In order to meet the serious harm requirement, corporate claimants trading for profit need to show that the publication has caused or is likely to cause serious financial loss. In fact, the only case to date to consider this requirement in any sort of detail was Brett Wilson v Persons Unknown [2015] EWHC 2628 (QB). Brett Wilson is a firm of solicitors that was targeted by a website calling itself Solicitors from Hell UK (SFHUK), which published allegations of (among other things) fraud, unethical practices, costs inflation, harassment, poor quality work and threatening behaviour by members of staff.

Warby J found that a case for serious financial loss had been made out. In particular, Brett Wilson explained that for six months Google searches (which were a key source of work for what was a small firm) had produced the SFHUK allegations as one of the top five search results for the firm, and that a prospective client previously wanting to instruct them on a piece of work had withdrawn as a result of the publication. Brett Wilson argued that many more instances where the firm had not been advised of the decision not to use them could be inferred and there had also been a noticeable drop in the conversion of enquiries to instructions.

Two important points should be noted from this case.

First, there was not an overwhelming amount of specific evidence of financial loss although Brett Wilson did assert that they had lost some business as a result. Their arguments again asked the Court to draw inferences on the basis of the likely consequences of these very damaging allegations appearing prominently on Google search results. The willingness of the Court to accept this suggests that, in a similar way to cases involving non-corporate claimants, the Courts will be willing to look at the wider circumstances and draw inferences from them if appropriate. Nonetheless, given harm to reputation is clearly a less tangible concept than serious financial loss, claimants should be thinking hard about the specifics of how the allegations in question have or are likely to cause serious financial loss even if the causal link between the publication and the financial loss will not always be easy to evidence.

Secondly, it should be noted that in Brett Wilson the defendants had not responded to any correspondence nor did they contest the hearing. The significance of the case should therefore not be overstated and more concrete analysis will be likely once further cases involving corporate claimants have been heard and properly contested.

Outlook

The Act remains very much in its early stages and the approach followed to date will be nuanced and developed as we move forward. The appellant publishers in Lachaux are set to argue that the inference of serious harm drawn by Warby J was wrong and that the decision in Cooke requires that such an inference should only be drawn in “rare circumstances” in the absence of specific evidence of harm. Time will tell whether they are successful, but the law at present appears to strike an appropriate balance between the reputational rights of claimants and the right to freedom of expression of publishers.

Claimants need to analyse both any specific evidence they have of serious harm to their reputations and also whether the overall context effectively means that serious harm can be said to have been caused. Meanwhile, unless and until the Court of Appeal in Lachaux alters the position, defendants can no longer simply rely on Cooke to dismiss complaints out of hand when there is a lack of specific evidence of harm. The bar has been raised but it is hard to believe that the Act intended for it to be placed at an insurmountable level.

Tom Rudkin is a member of the reputation management team at Farrer & Co.